“The idea here is simple: the busier a city is, the more pollution it creates. Compare current air quality readings, which are available with only a one-day lag, with data from previous years , and you get a reasonable estimate of whether production is going up or down,” says Colas.
Although the data is not perfect due to weather conditions, summer vacations and measures to reduce air pollution over time, it can still provide near real-time insight into hotel attendance. ‘a town. The Beijing Winter Olympics earlier this year also saw city authorities take steps to reduce pollution.
So what does the data show today?
According to Colas, cities in China, including Shanghai, Beijing, Shenzhen and Tianjin, are benefiting from cleaner air compared to 2021. For example, there were 62 green (clean) days in Shenzhen in 2022, compared to only 35 over the same period. in 2021. Shenzhen is a major tech manufacturing city just north of Hong Kong.
Although the city’s residents will appreciate the improved air quality, it’s not a good sign from an economic perspective, nor the best sign for Chinese stock investors.
“Even if China really does get its long-standing air pollution issues under control, the difference in just one year is significant enough to say that economic activity is, at best, unchanged from 2021,” he said. Colas said.
And investors’ pain isn’t likely to end anytime soon, according to DataTrek, which reminded readers that Chinese stocks were already under pressure before the COVID outbreak. as regulators crack down on big tech.
“Looking at this data, it’s easy to see both why Chinese equities and the yuan itself are under so much pressure in recent days. Based on this analysis, it’s hard to see these trends changing if early,” Colas concluded.